Consumer Behavior in China: An Exploratory Study of Two Cities

Abstract

Many multinational enterprises have not been successful in China. According to the literature, one of the reasons for their failure appears to be that planning has been centered on country-wide data, with little attention being paid to regional, social and cultural differences. This study shows the necessity of moving away from broad assumptions about China and the necessity of understanding China's regional and urban differences. There is much hearsay among expatriate managers in China and among others with respect to the supposed sophistication and mores of Shanghainese consumers. They are often described as being formal, fashion conscious and critical. To explore the assumptions that underpin this idea, and ideas like it, our research compared upscale consumers in Shanghai and Chengdu and the motivations and processes involved in making a purchase of a so called “shopping good.” We chose apparel as a proxy for a shopping good, on the grounds that it has high consumer involvement and recall. Our data reveal some important differences between the buying patterns in the two cities. They have pragmatic managerial implications for western multinational firms wanting to tap the top layer of the vast market of 1.3 billion Chinese people. Specifically, they demonstrate a need for adaptation of marketing strategies to reflect significant differences based on geographic location and the derivative differences in lifestyles.

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